Commonly Asked Questions About Instant Personal Loan
With digital advancement, India’s financial sector has witnessed a major change that has made it possible for citizens to get quick access to money. Today, one can easily avail of a loan from the comfort of his home without having to visit a bank or lender’s office. Fintech companies in India have now made it easy for loan seekers to get loans almost instantly without having to wait for a day even.
Instant loans’ popularity has been on the rise due to their easy availability and hassle-free online application process. However, when availing of this type of loan, you must read the below commonly asked questions to help you understand this loan product in detail.
What is an instant loan?
Just like a personal loan, an instant loan is an unsecured loan that does not require you to keep any collateral or guarantor.
This type of loan can be used to meet any emergency financial requirements, including wedding expenses, debt consolidation, purchasing assets, traveling, or even paying off the hospital bills. This type of loan involves minimal documentation process and is often disbursed instantly, unlike other types of disbursed loans within 3-4 days. This type of loan can be obtained from any online money-lenders in India or any banking institute.
Is a Credit score important when applying for an instant loan?
A credit score is one of the most important eligibility criteria that helps lenders assess your creditworthiness. The score ranges from 300 to 900, and any score above 700 is considered an ideal score for availing of an instant personal loan.
Having a low credit score is a sign of bad credit behavior and signifies a bad repayment history. A low credit score leads to loan rejection, whereas a high credit score helps you get an instant loan at a low-interest rate. All the lenders in India check the score, and the loan amount and the interest rate offered are also decided based on the score.
What are the eligibility criteria to avail of an instant loan in India?
For your instant loan application to be approved, you must fulfill the below eligibility requirements.
- You should be aged between 21-60 years;
- It would help if you were a salaried employee working as a public, private, or government employee;
- It would help if you were a citizen of India;
- You should have a monthly income of Rs. 20,000.
To be eligible to get an instant loan at an affordable interest rate, it is significant you have a good credit score. Usually, lenders prefer offering loans to individuals with a credit score of 700 and above.
What are the documents required to get an instant loan in India?
Below are the documents you have to submit to avail an instant loan
- Anyone identity proof such as PAN Card, Aadhar Card, Driving License or Passport
- Anyone address proof such as Passport, Aadhar Card, utility bill like water bill, electricity bill or phone bill
- 2 photocopies
- Last 3 months salary slip
- Last 3 months bank statement
How to apply for an instant loan?
There are various ways by which you can apply for an instant loan. You can either visit the lender’s office or apply online through the lender’s app or website. Some lenders also allow you to check your personal loan eligibility online before making a loan application.
When applying online, you can submit your personal and professional details online and upload scanned copies of the documents. Once your application is approved, the loan amount is disbursed immediately in your bank account.
How is instant loan EMI calculated?
The EMI of an instant loan is calculated based on loan tenure, loan amount, and the interest rate offered by the lender. You can use the loan EMI calculator tool to estimate the EMI you will have to pay towards the instant personal loan you opt for.
What are the benefits of availing of an instant loan?
- Instant disbursal: On successful loan approval, the loan amount is disbursed in your bank account immediately.
- Flexible tenures: These loans are generally offered for a tenure of 6 months-36 months. However, this may vary from lender to lender.
- No collateral required: This is a type of unsecured loan that does not require you to keep any asset as collateral or keep any guarantor.
- Less processing time: The processing time for an instant loan is lesser than the processing time for another type of unsecured loan.
- Affordable interest rates: Lenders usually charge an affordable interest on this type of loan, depending on your credit score.
What is the processing fee for an instant loan?
The processing fee for an instant loan is 2%-4% of the loan amount. However, this varies from lender to lender.